State Bank of India (SBI) on Monday said that it reduced average monthly balance requirement by up to 40 per cent with effect from April. SBI said the move on average monthly balance – which is the minimum average of deposits required by SBI customers in their savings accounts – followed “feedback from various stakeholders”. Comments from SBI, the country’s largest bank, came after reports had suggested that banks in the country collected Rs. 5,000 crore from customers for non-maintenance of minimum balance in accounts in 2017-18. The banking major also said that almost 40 per cent of its savings bank accounts were exempt from the average monthly balance rules.
SBI has classified its branches into four categories: rural, semi-urban, urban and metro. It has set different average monthly balances to customers holding savings bank accounts with it, depending on the location of branch. Customers failing to meet the average monthly balance requirements in a month have to bear certain penalty charges. These charges also vary for different SBI customers, depending on factors such as location of branch and degree of shortfall in average balance.
|SBI branch type||Average monthly balance requirement|
As many as 21 public sector banks and three major private sector lenders collected Rs. 5,000 crore from customers for non-maintenance of minimum balance in their accounts in 2017-18, news agency Press Trust of India reported on Sunday citing banking data. State Bank of India, which suffered a staggering net loss of Rs. 6,547 crore during 2017-18, led the pack in penalising its customers for not maintaining minimum account balance, according to the agency. (Read more)
SBI further said that it “steeply reduced” penalty charges for non-maintenance of average monthly balance. The reduction in penalty charges – applicable to customers unable to maintain the required monthly average of deposits in their accounts – was as much as 70 per cent in metro, urban and semi-urban categories, SBI noted.
In the rural branches, SBI said it had cut the penalty charges by as much as 75. It further said its charges for non-maintenance of AMB were “one of the lowest in the industry”.
With effect from April 2018, SBI charges a penalty amount ranging from Rs. 5 to Rs. 15 (plus GST) from its customers in case of non-maintenance of the required average balance in a month. Previously, the bank charged a penalty amount ranging from Rs. 20 to Rs. 50 for shortfall in the stipulated average monthly balance, according to the bank’s website – sbi.co.in.
|Branch type||Shortfall in average monthly balance||Penalty charges (excluding GST) for non-maintenance of required AMB|
|Metro and urban||<=50%||Rs. 10|
|> 50-75%||Rs. 12|
|> 50-75%||Rs. 10|
|> 50-75%||Rs. 7.5|
SBI also clarified that certain types of savings accounts offered by it are exempted from the average monthly balance requirements. In other words, SBI also offers certain types of savings bank accounts in which the customer is not required to maintain any particular monthly average of deposits. These include accounts such as those opened under the government’s financial inclusion scheme Jan Dhan Yojana and BSBD (basic savings bank deposit) accounts, according to the bank.
“…Savings bank accounts such as PMJDY / BSBD and of pensioner / minors / social security benefit holders accounts are exempted from AMB requirement and no charges are recovered from these accounts,” SBI said in its statement dated August 6.
SBI said it has around 42.5 crore savings bank accounts, of which almost 40 per cent are under the exempted category. Customers also have the option to convert their existing savings accounts to BSBD account free of cost, SBI added.